Draft bill would sunset RFS, establish national octane standard

On Nov. 21, Reps. John Shimkus, R-Ill, and Bill Flores, R-Texas, released a discussion draft of the 21st Century Transportation Fuels Act, which aims to sunset the Renewable Fuel Standard and transition to a national octane specification. Those in the biofuels industry are speaking out to criticize the bill for its treatment of the RFS.

The 34-page discussion draft includes a wide range of changes related to the U.S. fuels market and vehicle industry. One section of the bill states that starting with model year 2023 vehicles, motor vehicle manufacturers would be required to warrantee vehicles to operate with gasoline blends of up to E20 and designed to operate using gasoline that has a research octane number (RON) of 95 or higher.

The bill would also sunset the conventional biofuel pool under the RFS as of 2023. For 2020 through 2022, up to 15 billion gallons of conventional biofuel—which is primarily made up of corn ethanol—would be allowed to meet RFS standards. For calendar years 2023 through 2032, the EPA would be required to set RFS renewable volume requirements (RVOs) for advanced biofuel, cellulosic biofuels and biomass diesel in at levels equal to the volume of these fuels produced during the previous calendar year. A mid-year review would adjust the annual RVOs based on information from the EPA’s Moderated Transaction System. The surviving portion of the RFS would be repealed in 2033.

Regarding ethanol, the bill would prevent states from prohibiting or requiring any particular blend, concentration or percentage of ethanol in any automotive fuel. The bill would also extend the current Reid vapor pressure (RVP) waiver to fuel blends containing more than 10 percent ethanol.

“I’ve been engaged in the biofuel debate my entire career in Congress,” said Shimkus, whose district includes significant corn and soybean producers as well as major ethanol and oil refiners. “In this Congress—through three stakeholder roundtables, five subcommittee hearings, and countless other meetings and conversations—my goal was to look beyond just the Renewable Fuel Standard to comprehensively reshape federal transportation fuel policies in a way that could provide more value to consumers and more certainty to industry stakeholders."

“Much has changed in the markets for vehicles and fuels since the Renewable Fuel Standard (RFS) was established in 2005, and subsequently expanded in 2007. We have learned from robust stakeholder input through hearings, roundtables and meetings, that higher octane fuels can bring increased fuel economy and performance for next generation engines. Since ethanol is one of the lowest-cost sources of octane in many areas of the country, a transition from the RFS beginning in 2023 to a national octane specification creates new market opportunities for biofuel producers and gives certainty to refining stakeholders. Most importantly, the draft legislation preserves consumer choice and optimum fuel and vehicle costs for more efficient transportation for future decades,” Flores commented.

“The draft legislation we are sharing today enables a transition to 21st century vehicle drivetrains by bringing together both new ideas and technologies as well as long-sought reforms to existing policies,” the congressmen added. “This sets the stage to modernize federal polices and deliver a new generation of more efficient and cost-effective vehicles and engines and fuels for American consumers. We appreciate the stakeholders who have engaged in this effort and look forward to continuing to improve upon the policies and legislative language we’ve put forward for consideration and discussion.”

In a statement issued in response to the legislation, Growth Energy said it welcomed any improvements to nationwide octane standards, but stressed the RFS must be left in force. “While we welcome any improvements to octane standards nationwide, this bill would turn back the clock on our nation’s commitment to renewable biofuels, completely undermining the benefits that consumers have come to expect from ethanol at the pump,” said Emily Skor, CEO of Growth Energy. “Ethanol itself has a natural octane of 113 and a lower carbon content than the gasoline components it replaces. It is only through coupling a stable Renewable Fuel Standard with improvements to octane standards that consumers can continue to reap the increased engine efficiency, environmental benefits, and cost savings that ethanol provides.”

The Advanced Biofuels Business Council called the bill a dead-end proposal. “Oil companies have been pitching so-called ‘reforms’ since the RFS was adopted, but even they acknowledge that Congress is not going to gut the market for homegrown biofuels,” said Brook Coleman, executive director of the ABBC. “This is just another in a long line of dead-end proposals to phase out renewable fuels. The only mystery is why anyone would expect biofuel or farm supporters to be fooled by bait-and-switch octane standards that are no higher than today’s premium fuel. All the bill does is free oil companies to come up with new ways to avoid using biofuel, even if means higher fuel prices and more toxic, petroleum-based additives. This is a zero-growth proposal for the renewable fuels industry, and farmers know it.”